Quarterly report pursuant to Section 13 or 15(d)

7. Leases

v3.23.1
7. Leases
3 Months Ended
Mar. 31, 2023
Leases [Abstract]  
7. Leases

7. Leases

 

The Company’s portfolio of leases contains both finance and operating leases that relate to real estate agreements, vehicles and office equipment agreements.

 

Operating leases

 

Real estate agreements

 

The Company has several property lease agreements in Italy and Austria and one lease agreement in the U.S. which have terms in excess of a twelve month period, these property leases are for our administrative operations in these countries. The Company does not and does not intend to take ownership of the properties at the end of the lease term. 

  

Vehicle agreements

 

The Company leases several vehicles for business use purposes, the terms of these leases range from twenty four to forty-eight months. The Company does not and does not intend to take ownership of the vehicles at the end of the lease term.

 

Finance Leases

 

Office equipment agreements

 

The Company has entered into several finance leases for office equipment, the term of these leases range from thirty-six to sixty months. The Company takes ownership of the office equipment at the end of the lease term.

 

Right of use assets

 

Right of use assets included in the condensed consolidated balance sheet are as follows:

 

   

March 31,

2023

 

December 31,

2022

Non-current assets                
Right of use assets - operating leases, net of amortization   $ 1,741,917     $ 1,498,703  
Right of use assets - finance leases, net of depreciation – included in property and equipment   $ 7,070     $ 8,884  

 

 

 Lease costs consists of the following:  

                 
    Three Months Ended March 31,
    2023   2022
Finance lease cost:                
Amortization of financial lease assets   $ 1,904     $ 2,011  
Interest expense on lease liabilities     107       141  
                 
Operating lease cost     306,467       89,015  
                 
Total lease cost   $ 308,478     $ 91,167  

 

Other lease information: 

 

    Three Months ended March 31,
    2023   2022
Cash paid for amounts included in the measurement of lease liabilities        
Operating cash flows from finance leases   $ (107 )   $ (141 )
Operating cash flows from operating leases     (306,467 )     (89,015 )
Financing cash flows from finance leases     (1,999 )     (2,062 )
                 
Weighted average remaining lease term – finance leases     1.94 years       1.70 years  
Weighted average remaining lease term – operating leases     4.19 years       4.24 years  
                 
Weighted average discount rate – finance leases     5.25 %     3.73 %
Weighted average discount rate – operating leases     3.15 %     2.61 %

 

 

Maturity of Leases

 

Finance lease liability

 

The amount of future minimum lease payments under finance leases are as follows:

 

Finance lease liability   Amount
     
Remainder of 2023   $ 5,101  
2024     1,276  
2025     494  
2026     494  
2027     372  
Total undiscounted minimum future lease payments     7,737  
Imputed interest     (525 )
Total finance lease liability   $ 7,212  
         
Disclosed as:        
Current portion   $ 5,588  
Non-Current portion     1,624  
    $ 7,212  

 

Operating lease liability

 

The amount of future minimum lease payments under operating leases are as follows:

 

Operating lease liability   Amount
     
Remainder of 2023   $ 353,422  
2024     436,883  
2025     391,702  
2026     327,917  
2027 and thereafter     270,473  
Total undiscounted minimum future lease payments     1,780,397  
Imputed interest     (87,237 )
Total operating lease liability   $ 1,693,160  
         
Disclosed as:        
Current portion   $ 403,462  
Non-Current portion     1,289,698  
    $ 1,693,160